Indivior, Inc. v. Dr. Reddy's Laboratories S.A.

CourtDistrict Court, D. Delaware
DecidedApril 23, 2020
Docket1:14-cv-01451
StatusUnknown

This text of Indivior, Inc. v. Dr. Reddy's Laboratories S.A. (Indivior, Inc. v. Dr. Reddy's Laboratories S.A.) is published on Counsel Stack Legal Research, covering District Court, D. Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Indivior, Inc. v. Dr. Reddy's Laboratories S.A., (D. Del. 2020).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE

INDIVIOR INC., INDIVIOR UK LIMITED, and AQUESTIVE THERAPEUTICS, INC.,

Plaintiffs, v.

Civil Action No. 14-cv-1451-RGA DR. REDDY’S LABORATORIES S.A. and DR. REDDY’S LABORATORIES, INC.,

Defendants.

MEMORANDUM OPINION Jack B. Blumenfeld, Jeremy A. Tigan, MORRIS, NICHOLS, ARSHT & TUNNELL LLP, Wilmington, DE;

Attorneys for Plaintiffs Indivior Inc., Indivior UK Limited, and Aquestive Therapeutics, Inc.

Jeffrey B. Elikan, Jeffrey H. Lerner, R. Jason Fowler, Erica N. Andersen, Matthew Kudzin (argued), COVINGTON & BURLING LLP, Washington, DC;

Attorneys for Plaintiffs Indivior Inc. and Indivior UK Limited

James F. Hibey, STEPTOE & JOHNSON LLP, Washington, DC; Jamie Lucia, STEPTOE & JOHNSON LLP, San Francisco, CA;

Attorneys for Plaintiff Aquestive Therapeutics, Inc.

Stephen B. Brauerman, BAYARD, P.A., Wilmington, DE; Elaine Herrmann Blais (argued), Robert Frederickson, III, Molly Grammel, Alexandra Lu, Kathryn Kosinski, GOODWIN PROCTER LLP, Boston, MA; Robert V. Cerwinski, Ira Jay Levy, GOODWIN PROCTER LLP, New York, NY;

Attorneys for Defendants

April 23, 2020 /s/ Richard G. Andrews ANDREWS, U.S. DISTRICT JUDGE:

Before the Court is Defendants’ Motion for Attorneys’ Fees and Costs Pursuant to 35 U.S.C. § 285. (D.I. 334). The Court has considered the parties’ briefing. (D.I. 335, 343, 346). The Court heard helpful oral argument. (D.I. 360). I. BACKGROUND Plaintiffs filed the instant action against Defendants alleging that Defendants’ ANDAs infringed several of Plaintiffs’ patents. (D.I. 335 at 3). Three patents remained at issue in the instant case: U.S. Patent Nos. 8,603,514 (“the ’514 patent”), 8,017,150 (“the ’150 patent”), and 8,900,497 (“the ’497 patent”). (Id.). The ʼ514 and ʼ497 patents are directed toward the manufacture of buprenorphine/naloxone sublingual films. (Id.). The ʼ150 patent is directed toward the formulation of those films. (Id.). I issued a memorandum opinion providing claim construction for multiple terms of the ʼ514, ʼ497, and ʼ150 patents. (D.I. 175). I held a four-day bench trial in November 2016 with respect to the ʼ514 and ʼ497 patents. (D.I. 299; D.I. 300; D.I. 301; D.I. 302). I determined that Defendants did not infringe any asserted claim of the ʼ514 and ʼ497 patents and that Defendants failed to meet their burden of showing that the asserted claims of these patents were invalid as obvious. (D.I. 312 at 9, 42). I separately held a one-day bench trial in November 2016 for the ʼ150 patent. (D.I. 298). I determined that because the dedication-disclosure rule applied,

Plaintiffs failed to show that Defendants infringed the ʼ150 patent. (D.I. 313 at 11). I also determined that Defendants did not meet their burden of showing that the asserted claims of the ʼ150 patent were obvious. (Id. at 19). Defendants appealed from my decisions holding the asserted patents not invalid as obvious. Indivior Inc. v. Dr. Reddy’s Labs., S.A., 930 F.3d 1325, 1330 (Fed. Cir. 2019). Plaintiffs cross-appealed from my findings that Defendants did not infringe either the ʼ514 or the ʼ150 patents. Id. at 1331. The Federal Circuit affirmed my finding that Defendants do not infringe the asserted claims of the ʼ514 patent and that the ʼ514 patent is not invalid for obviousness. Id. at 1339, 1346. The Federal Circuit also affirmed my findings that the

Defendants do not infringe the asserted claims of the ʼ150 patent and that those claims are not invalid for obviousness. Id. at 1347, 1349. Defendants now seek attorneys’ fees and costs. (D.I. 334). II. LEGAL STANDARD The Patent Act provides that the court “in exceptional cases may award reasonable attorney fees to the prevailing party.” 35 U.S.C. § 285. The Supreme Court has defined an “exceptional” case as “simply one that stands out from others with respect to the substantive strength of a party’s litigating position (considering both the governing law and the facts of the case) or the unreasonable manner in which the case was litigated.” Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545, 554 (2014). When considering whether a case is

exceptional, district courts are to exercise their discretion on a case-by-case basis, considering the totality of the circumstances. Id. Relevant factors for consideration include “frivolousness, motivation, objective unreasonableness (both in the factual and legal components of the case) and the need in particular circumstances to advance considerations of compensation and deterrence.” Id. at 554 n.6 (internal quotation marks omitted). A movant must establish its entitlement to attorneys’ fees under § 285 by a preponderance of the evidence. Id. at 557. III. DISCUSSION It is undisputed that Defendants are the prevailing party. Thus, I address whether the case is exceptional. 1. “The Substantive Strength of a Party’s Litigating Position” In Octane Fitness, the Supreme Court rejected as “overly rigid” and “too restrictive” the Federal Circuit’s previous § 285 case law requiring “both that the litigation is objectively baseless and that the plaintiff brought it in subjective bad faith.” 572 U.S. at 555. Instead, the

Supreme Court held that “a case presenting either subjective bad faith or exceptionally meritless claims may sufficiently set itself apart from mine-run cases to warrant a fee award.” Id. Defendants argue that Plaintiffs’ infringement claims were baseless after the claim construction of the “dried/drying” limitations of the ʼ514 and ʼ497 patents. (D.I. 335 at 12).1 Defendants assert that Plaintiffs failed to conduct adequate discovery in support of their infringement claims for those patents,2 and that one of Plaintiffs’ experts was only “thinly” qualified.3 (Id.). Defendants further argue that Plaintiffs’ claim of infringement of the “visco-

1 At argument, counsel succinctly introduced Defendants’ position: “This is a case that became exceptional on June 29th, 2016 when [the Court] issued a claim construction that made it very clear to us that the plaintiffs had lost on infringement.” (D.I. 360 at 4). The claim construction ruling occurred about nineteen months after the suit was filed and about four and one-half months before the trials took place. Exceptional cases can arise from “a single, isolated act,” and thus can arise from an act (and subsequent conduct in conformity with the act) occurring late in the case. But the question is not whether the act is exceptional, the question is whether the case as a whole, including the act, is exceptional. See Intellectual Ventures I LLC v. Trend Micro Inc., 944 F.3d 1380, 1384 (Fed. Cir. 2019). As is permissible, and showing good judgment, Defendants only seek fees for their expenses, estimated to be about $3,200,000, after June 29, 2016. (D.I. 335 at 20). 2 Most of the asserted lack of discovery occurred before my claim construction ruling, which occurred after expert discovery had begun. It is possible that Plaintiffs could have stipulated to non-infringement after claim construction and before trial, and perhaps they should have after Defendants made such a proposal (see D.I. 351, 352), but I cannot say that was the only reasonable course of action. It was not clear to me at trial that Plaintiffs’ infringement position was completely meritless, although, based on the trial record, it was certainly an uphill struggle. I also note that the claim construction issue relating to the dried/drying limitation was, in my opinion, a close one, and one with which I struggled during the litigation of this case and the related cases.

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